3 CCR 702-5
DEPARTMENT OF REGULATORY AGENCIES Division of Insurance PROPERTY AND CASUALTY 3 CCR 702-5 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _______________________________________________________________________________ Regulation 5-1-1 MASS MERCHANDISING OF PROPERTY AND LIABILITY INSURANCE Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § 10-1-109, C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to prescribe rules to prevent abuses in connection with the sale of property and liability insurance in this state pursuant to mass marketing plans, while preserving for consumers the potential benefits of this form of marketing. Section 3 Applicability This regulation is in addition to, and not a substitution for, other applicable requirements of the Colorado insurance laws. It is not applicable to group life or group accident and health insurance or to marketing methods other than mass merchandising as defined herein. Section 4 Definitions As used in this regulation:
A. "Mass merchandising" means the marketing of property and liability insurance through the sponsorship and assistance of an eligible group for the benefit of the eligible members thereof.
B. "Property and liability insurance" means all insurance to which the provisions of § 10-3-102(1)(a) and (c), C.R.S., apply.
C. "Group property and liability insurance" means all property and liability insurance issued to an eligible group for the benefit of the eligible members thereof, under a single insurance program, without individual underwriting, on a guaranteed issue basis, subject to the provisions of Section 5.
D. "Non-group property and liability insurance" means all property and liability insurance issued to individual members of an eligible group, with individual underwriting for determination of proper premium rates, on a guaranteed issue basis, subject to the provisions of Section 6.
E. "Eligible group" means any organization or association of persons which has not been organized principally for the purpose of obtaining insurance under a mass merchandising plan. An eligible group may consist of members of a union, employees of a common employer, members of an association, and the like, or any class or classes thereof, as determined by the conditions pertaining to employment or membership. Any such association must have been in existence for at least two (2) years prior to the purchase of insurance under a mass merchandising plan.
F. "Eligible members" means all the employees and retirees of a common employer or members, in good standing, of an eligible group.
G. "Employees" means all active employees of a common employer, including proprietors, partners and directors, who are engaged in at least thirty (30) hours of employment per week. The term may apply to one or more subsidiaries or affiliates.
H. "Eligible member insured" means an eligible member of an eligible group who is provided insurance coverage under a mass merchandising plan.
Section 5 Mass Merchandising of Group Property and Liability Insurance Group property and liability insurance may be issued in Colorado under a mass merchandising plan provided the following conditions are complied with:
A. At the inception date of the group mass merchandising plan, the group must consist of at least 50 eligible members of which at least 50% said eligible members must agree in writing to participate in the mass merchandising plan at the expiration of existing insurance. At all times thereafter at least 50% of all eligible members must participate in the mass merchandising plan.
B. Insurance coverage must be provided to all eligible members of the eligible group desiring to participate in the mass merchandising plan, unless at least one of the reasons for cancellation or nonrenewal listed in paragraph A of Section 7 is known to exist.
C. Each eligible member insured must be issued the same form of policy, varying only as to the amounts of insurance coverage and limits of liability; except that, in the case of automobile insurance, uniform limits for bodily injury and property damage perils may be established and uniform comprehensive, collision and other supplemental coverages may be made optional.
D. Insurance must be provided either by individual policies, or individual certificates issued under a master policy and subject to the same terms and conditions as therein contained, to each subscribing member of the group.
Section 6 Mass Merchandising of Non-Group Property and Liability Insurance Non-group property and liability insurance may be issued in this state under a mass merchandising plan providing the following conditions are complied with:
A. All subscribing members must be eligible members of an eligible group, but the provisions of paragraph A of Section 5 regarding the minimum number of eligible members and percentage of participation shall not apply to mass merchandising of non-group property and liability insurance.
B. Insurance coverage must be provided to all eligible members of the eligible group desiring to participate in the mass merchandising plan at a premium rate based upon the applicant's proper classification unless at least one of the reasons for cancellation or nonrenewal listed in paragraph A of Section 7 is known to exist.
C. Insurance must be provided by individual policies to each subscribing member. Section 7 Cancellation and Non-Renewal A. Insurance coverage provided an eligible member insured under a mass merchandising plan for any line of business may be canceled or nonrenewed pursuant to Colorado insurance laws and regulation and the terms of the insurance contract.
B. All mass marketing plans shall provide the eligible member insured under such plan with an opportunity to purchase individual equivalent coverage from the same insurer or one of its affiliates upon termination of employment or membership or upon the discontinuance of the mass marketing plan. The failure of the eligible group to remit premiums when due shall not be regarded as non-payment of premium by an eligible member insured under any mass merchandising plan, unless such insured shall have been given written notice of such failure to remit and has not paid such premium by the later of: (a) thirty (30) days after such notice; or (b) the due date of such premium remittance under the mass merchandising plan.
C. Any notice of cancellation or non-renewal of any coverage of an eligible member insured under a non- group property and liability insurance plan shall be accompanied by a notice that, at his or her request, the insurer will afford a reasonable opportunity to the eligible member insured and/or the eligible group to present facts in opposition to cancellation or non-renewal. Section 8 Conversion A. Every policy of mass merchandised property and liability insurance shall contain a provision that if the eligible member insured's employment or membership in the eligible group is terminated or if the mass merchandising plan is terminated, the eligible member insured shall be entitled to:
B. The premium for any individual insurance policy issued by the insurer pursuant to this section shall be at the insurer's then customary rate applicable to the coverage provided and to the class of risk to which the insured belongs on an individual basis.
C. The failure of the eligible member insured to exercise his or her conversion privileges under this Section shall be treated as a voluntary termination of the coverage by the eligible member insured.
Section 9 Maintenance of Records Every insurer writing insurance under mass merchandising plans shall keep and maintain separate statistics for each classification of insurance within such plans, to include but not limited to complete records of premium income, losses and expenses, and adding thereto appropriate expense factors for acquisition, advertising, tax liabilities, legal, accounting, data processing and research and development expense. Said statistics from each of the above-listed factors shall be used to promulgate the premium rates and rating plans and to insure that the costs of the mass merchandising plans are in no way transferred to the rates of individuals who are not insured under such plans. Section 10 Premium Rates Premium rates under a mass merchandising plan must not be excessive, inadequate or unfairly discriminatory. Rates shall not be deemed to be unfairly discriminatory because different premiums result for policyholders with like exposures, but different expense factors, or like expense factors, but different loss exposures, so long as the rates reflect the difference with reasonable accuracy. Rates shall not be deemed to be unfairly discriminatory if they are averaged broadly among persons insured under a mass merchandising plan.
Section 11 Experience Rating Experience rating must be applied to any eligible group based on the experience of that group during the preceding insurance year or years.
Section 12 Producers No person shall act as an insurance producer in connection with any mass merchandising plan for any kind of insurance unless such person is duly licensed as a producer for such kind of insurance. For the purposes of this regulation, the following activities, if performed by the sponsoring eligible group, shall not require a producer’s license:
A. Collection and remittance of premium.
B. Distribution to eligible members of insurer prepared information pertaining to the mass merchandising plan.
C. Administrative services in connection with the mass merchandising plan. Section 13 Compulsory Participation Prohibited No employee or member shall be subject to any penalty, coercion, intimidation, or be discriminated against because of nonparticipation in any mass merchandising plan. Section 14 Tie-In Sales Prohibited No insurer shall sell insurance pursuant to a mass merchandising plan if the purchase of insurance available under such plan is contingent upon the purchase of any other insurance, product or service, or if the purchase or price of any other insurance, product or service is contingent upon the purchase of insurance available under such plan. This provision shall not be deemed to prohibit the reasonable requirement of safety devices, such as heat detectors, lightning rods, theft prevention equipment, and the like.
Section 15 Disclosure Required Every insurer or producer selling insurance, pursuant to a mass merchandising plan shall, prior to sale, provide full and fair disclosure to all prospective eligible member insureds, of all essential features of such plan, whether favorable or unfavorable, including, but not limited to, premium rates, benefits, duration of coverage, conversion privileges, and policyholder services. Section 16 Severability If any provisions of this regulation or its application to any person or circumstances are for any reason held to be invalid, the remainder of the regulation shall not be affected in any way. Section 17 Enforcement Non compliance with this Regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of insurance license. Section 18 Effective Date This regulation is effective on June 1, 2012.
Section 19 History Originally issued as Regulation 72-8, effective April 1,1972. Renumbered as Colorado Regulation 5-1-1 on June 1,1992. Amended Regulation effective January 1, 2002.
Amended Regulation effective April 1, 2002.
Sections 2, 3, 7, 18 and 19 amended effective February 1, 2004. Sections 7 and 18 amended effective January 1, 2005.
Amended regulation effective July 15, 2011.
Amended regulation effective June 1, 2012 Regulation 5-1-2 APPLICATION AND BINDER FORMS Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Rules Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109 and 10-3-1110, C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to implement rules that provide clear disclosure of the insurance company on the application form or on the binder. In addition, this regulation is designed to eliminate the unfair practice of providing false or misleading information by individuals who are not disclosing the name of the insurance company on an application form or a binder for insurance. Section 3 Applicability This regulation shall apply to all property and casualty insurance coverage lawfully issued and delivered in the State of Colorado, except surplus line risks or insurance under the Colorado Motor Vehicle Insurance Plan under § 10-4-412, C.R.S.
Section 4 Definitions A. “Binder” means a writing which describes the subject and amount of insurance and temporarily binds insurance coverage pending the issuance of an insurance policy.
B. “Application” shall include any application form or enrollment form for coverage under any policy. Section 5 Rules A producer shall clearly disclose the name of the insurance company on all applications, binders, and similar forms that will be used to insure the risk prior to the time the policy reaches the applicant. Section 6 Severability If any provision of this regulation or the application or it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 7 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 8 Effective Date This regulation is effective on July 1, 2012.
Section 9 History Regulation 74-9, was effective 1974.
Regulation 74-9 was renumbered as Regulation 5-1-2, effective July 1, 1993. Regulation 5-1-2 was repealed and revised effective December 1, 2001. Amended regulation effective July 1, 2012.
Repealed and Repromulgated Regulation 5-1-6 NATIONWIDE INLAND MARINE DEFINITION Section 1. Purpose Section 2. Basis & Purpose Section 3. Applicability Section 4. Exceptions Section 5. Severability Section 6. Enforcement Section 7. Effective Date Section 8. History Section 1. Authority This amended regulation is promulgated under the authority of § 10-1-109, C.R.S. Section 2. Basis and Purpose The purpose of this regulation is to adopt a standard definition of “inland marine” insurance. Section 3. Applicability Marine or transportation policies may cover under the following conditions:
A. Imports Imports may be covered wherever the property may be and without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation. An import, as a proper subject, or marine or transportation insurance, shall be deemed to maintain its character as such, so long as the property remains segregated in such a way that it can be identified and has not become incorporated and mixed with the general mass of property in the United States, and shall be deemed to have been completed when the property has been:
B. Exports Exports may be covered wherever the property may be without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation. An export, as a proper subject of marine or transportation insurance, shall be deemed to acquire its character as such when designated or while being prepared for export and retain that character unless diverted for domestic trade, and when so diverted, the provisions of this ruling respecting domestic shipments shall apply. However, this provision shall not apply to long established methods of insuring certain commodities (e.g., cotton).
C. Domestic Shipments
D. Bridges, Tunnels and Other Instrumentalities of Transportation and Communication (excluding buildings, their improvements and betterments, furniture and furnishings, fixed contents and supplies held in storage)
E. Personal Property Floater Risk covering individuals and/or generally
F. Commercial Property Floater Risks covering property pertaining to a business, profession or occupation
If written for account of owner, the coverage shall cease upon completion and acceptance thereof; or if written for account of a seller or contractor the coverage shall terminate when the interest of the seller or contractor ceases.
Section 4. Exceptions Unless otherwise permitted, nothing in the foregoing shall be construed to permit marine or transportation policies to cover:
A. Storage of assured’s merchandise, except as hereinbefore provided.
B. Merchandise in course of manufacture, the property of and on the premises of the manufacturer.
C. Furniture and fixtures and improvements and betterments to buildings.
D. Monies or securities in safes, vaults, safety deposit vaults, bank or assured’s premises, except while in the course of transportation.
Section 5. Severability If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation shall not be affected thereby. Section 6. Enforcement Non-compliance with this regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws, which include the imposition of fines and/or suspension or revocation of license. Section 7. Effective Date This regulation will be effective January 1, 2006.
Section 8. History New regulation 78-14, effective 1978.
Amended, effective July 1, 1993.
Amended, effective March 1, 1994.
Amended effective January 1, 2006.
Regulation 5-1-8 CONCERNING CLAIMS-MADE INSURANCE POLICIES Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Rules Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of §10-1-109, C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to establish standards for the training of all persons engaged in the sale or consultation of claims-made policies in compliance with §10-4-419(2)(g) or in adjusting claims under such policies, and to provide minimum disclosure standards for claims-made insurance policies. Section 3 Applicability This regulation applies to casualty insurers writing policies on a claims-made basis. This regulation does not apply to persons engaged in the sale or consultation of surplus lines claims-made insurance policies or in adjusting claims under such policies.
Section 4 Definitions A. "Claims-made coverage" means an insurance policy that provides coverage only if a claim is made during the policy period or any applicable extended reporting period. A claim made during the policy period could be charged against a claims-made policy even if the injury or loss occurred many years prior to the policy period. If a claims-made policy has a retroactive date, an occurrence prior to that date is not covered.
B. "Extended reporting period" means a period allowing for making claims after expiration of a claims- made policy. This is also known as a "tail".
C. “Occurrence coverage" means an insurance policy that provides liability coverage only for injury or damage that occurs during the policy term, regardless of when the claim is actually made. A claim made in the current policy year could be charged against a prior policy year, or may not be covered, if it arises from an occurrence prior to the effective date.
D. "Retroactive date" means the date on a claims-made policy which denotes the commencement date of coverage under the policy.
Section 5 Rules A. Training/Education
7 The two-hour claims-made policy training may be counted toward the twenty-four hour continuing education requirement of insurance producers.
B. Disclosure Form At the time of commencement of coverage either the insurer or the insurance producer shall execute a proof of delivery and acceptance of the disclosure form. The proof of delivery and acceptance shall be maintained in the insurer or producer file for at least two years beyond the term of the policy. In connection with the sale of any claims-made policy, the insurer shall give to the insured a disclosure statement substantially in the following form:
PRINCIPAL BENEFITS This policy provides for ______________ (insert brief description of coverage) up to the maximum dollar limit specified in the policy.
CAREFULLY REVIEW YOUR POLICY REGARDING THE AVAILABLE EXTENDED REPORTING PERIOD COVERAGE, INCLUDING THE LENGTH OF COVERAGE, THE PRICE AND THE TIME PERIOD DURING WHICH YOU MUST PURCHASE OR ACCEPT ANY OFFER FOR EXTENDED REPORTING PERIOD COVERAGE.
Section 6 Severability If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby. Section 7 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 8 Effective Date This regulation is effective July 1, 2012.
Section 9 History Originally issued as Regulation 86-4, effective November 1, 1986. Re-codified as Regulation 5-1-8, effective June 1, 1992. Amended, effective October 1, 1996.
Amended, effective September 1, 2003.
Amended Regulation 5-1-8 effective July 1, 2012.
Regulation 5-1-9 REGULATION TO REQUIRE REPORTING OF FINANCIAL AND STATISTICAL DATA BY PROPERTY AND CASUALTY INSURANCE COMPANIES Section 1 Authority Section 2 Purpose Section 3 Applicability Section 4 Definitions Section 5 Examination of Statistical Agents Section 6 Filing of Statistical Plans by Statistical Agents Section 7 Statistical Plans and Reporting by Insurers Section 8 Statistical Agents’ Compliance with Statistical Handbook Section 9 Multiple Statistical Agents for the Same Line of Business Section 10 Edit and Control Procedures for Statistical Agents Section 11 Insurer Edit and Audit Procedures Section 12 Adoption of Changes to Statistical Handbook Section 13 Disclosure of Complying and Non-Complying Insurers Section 14 Access to Data Section 15 Disclosure of Data Section 16 Exemption Section 17 Lines of Insurance without a Statistical Agent Section 18 Severability Section 19 Incorporated Materials Section 20 Enforcement Section 21 Effective Date Section 22 History Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109, and 10-4-404(1), C.R.S.
Section 2 Purpose The purpose of this regulation is to set forth the manner of reporting data by insurers to statistical agents, to prescribe reports to be submitted by statistical agents to the commissioner, and to prescribe certain conduct in connection therewith. This regulation does not apply to data reported directly by insurers to the commissioner.
Section 3 Applicability This regulation applies to property and casualty insurers writing insurance in the State of Colorado. This regulation does not apply to title insurance, reinsurance and ocean marine insurance. Section 4 Definitions A. “NAIC Statistical Handbook or Handbook” is a publication of the National Association of Insurance Commissioners (NAIC) which explains insurance statistical data and contains reporting requirements and report formats to be regularly furnished by statistical agents.
B. “Statistical agent” is an entity that has been designated by the commissioner to collect statistics from insurers and provide reports developed from these statistics to the commissioner for the purpose of fulfilling the statistical reporting obligations of those insurers.
C. “Statistical plan” is a statistical agent’s system for collecting information from reporting insurers, including exposure, coverage, classification, territory, premium, loss and other information. Section 5 Examination of Statistical Agents To be designated to collect statistics from insurers for purposes of fulfilling the statistical reporting requirements of this rule, an entity other than a licensed advisory organization shall be subject to the same examination provisions as licensed advisory organizations. Section 6 Filing of Statistical Plans by Statistical Agents Every statistical agent shall file with the commissioner every statistical plan and every modification that it proposes to use to collect statistics to meet the requirements of this regulation. Section 7 Statistical Plans and Reporting by Insurers Every insurance company licensed in this state shall report its insurance statistical experience for lines of insurance covered by this regulation to a statistical agent designated by the commissioner. This data shall be submitted in accordance with statistical plans approved in accordance with Section 6 of this rule. Section 8 Statistical Agents’ Compliance with Statistical Handbook For every line of insurance wherein statistics are collected in this state, every statistical agent shall, at a minimum, collect statistics and file reports and compilations in the form and detail provided in the NAIC Statistical Handbook, 2004 edition, unless otherwise specified by the commissioner. Section 9 Multiple Statistical Agents for the Same Line of Business For lines of insurance where more than one statistical agent has been designated and collects statistics in this state, the statistical agents shall, if so directed by the commissioner, arrange to file combined reports for all statistical agents collecting data for the specified lines of insurance. The statistical agents may make arrangements among themselves for the equitable sharing of the costs to produce such combined reports.
Section 10 Edit and Control Procedures for Statistical Agents Statistical agents shall adopt, edit and control procedures to screen and check data required by this regulation for reasonableness, accuracy and completeness. These procedures shall, at a minimum, conform to the specifications provided in the NAIC Statistical Handbook, 2004 edition, unless otherwise specified by the commissioner.
Section 11 Insurer Edit and Audit Procedures Insurers shall adopt , edit and audit procedures to screen and check data required by this regulation to be reported to determine that such data meets the standards for reasonableness , accuracy , and completeness provided in the NAIC Statistical Handbook, 2004 edition, unless otherwise specified by the commissioner.
Section 12 Adoption of Changes to the Statistical Handbook Revisions to the Statistical Handbook shall apply upon the commissioner’s notification to insurers or statistical agents of the adoption of the revisions and their effective dates. Statistical agents shall notify insurers that report to them of any changes that affect data collection or the reporting activities of insurers. Section 13 Disclosure of Complying and Non-Complying Insurers Statistical reports shall each contain a listing of insurers whose data are included. In addition, if data from an insurer or insurers that had agreed to have data included are, in fact, not included, then a listing of these insurers shall also be made with the statistical report as specified in the NAIC Statistical Handbook. For any insurer that is listed as not included in a statistical report, the statistical agent shall, upon the request of the commissioner, provide reasons for the exclusion. Section 14 Access to Data The commissioner shall have access to all statistical data that have been collected by statistical agents for the purpose of fulfilling the requirements of this regulation. Upon request by the commissioner, the statistical agent shall provide a copy of any report that it produces from data that the commissioner has required to be collected.
Section 15 Disclosure of Data All data submitted to the Commissioner shall be considered public and shall be open to inspection by the public, unless the information may be considered confidential pursuant to § 24-72-204, C.R.S. If the statistical agent desires confidential treatment of any information submitted, as required in this regulation, a “Confidentiality Index” must be completed. The Division will evaluate the reasonableness of any request for confidentiality and will provide notice to the insurer or statistical agent if the request for confidentiality is rejected.
Section 16 Exemption Upon application by a statistical agent or an individual insurer, the commissioner may allow the submission of a report or statistical data at a specified later date if the submission of the report or data on the date required by this regulation would create a substantial hardship on the statistical agent or insurer. In considering whether to grant such an exemption, the commissioner shall consider whether the delay is necessitated by an unusual or a one-time situation, or whether the delay is necessitated by a situation that is likely to reoccur. When the delay is necessitated by a situation that is likely to reoccur, the commissioner may condition the granting of an exemption on whether the insurer or statistical agent has a plan of action to address the situation in the future. Section 17 Lines of Insurance without a Statistical Agent Any licensed insurer writing any line of insurance not exempted in Section 3 of this regulation that finds or believes to have found that it is writing a line or type of insurance for which no statistical agent will accept data shall notify the commissioner of this fact as soon as practicable. Section 18 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 19 Incorporated Materials The NAIC Statistical Handbook or Handbook published by National Association of Insurance Commissioners shall mean the Handbook as published on the effective date of this regulation and does not include later amendments to or editions of the Handbook. A copy of the Handbook may be examined at any state publications depository library.
Section 21 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 22 Effective Date This regulation shall become effective on August 1, 2012. Section 23 History Original regulation effective May 1, 1988.
Repromulgated regulation effective August 1, 2012.
Regulation 5-1-10 RATE AND RULE FILING SUBMISSION REQUIREMENTS PROPERTY AND CASUALTY INSURANCE Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109, 10-3-1110, 10-4-404, and 10-4-404.5, C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to ensure that property and casualty insurance rates are not excessive, inadequate or unfairly discriminatory by establishing the requirements for rate and rule filings. This regulation contains annual rate filing requirements for homeowners and private passenger automobile insurance. These lines of business are specifically included in this regulation because these products are widely purchased by consumers. Annual rate filings, rather than other methods the Division of Insurance may use, are preferred because of the prospective nature of the information contained in rate filings. Since a company’s rates filed with the Division of Insurance must be used until replaced by another rate filing, the Commissioner of Insurance cannot determine if rates included in prior rate filings continue to be appropriate for current or future economic conditions, or adequately reflect recent Colorado loss experience. Rate filings are reasonable and necessary means to ensure that current rates are appropriate and compliant with Colorado statutes and regulations.
Section 3 Applicability This regulation applies to all rate filings submitted by companies operating in the State of Colorado as defined in Section 4. The following lines of business, however, are specifically excluded from the requirements of this regulation: reinsurance, ocean marine, life, health, surplus lines, insurers negotiating and entering into insurance coverage agreements with an exempt commercial policyholder and credit insurance subject to the requirements of Colorado Insurance Regulation 4-9-2. Section 4 Definitions A. “Classification System" or "Classification" means the plan, system, or arrangement for recognizing differences in exposure.
B. “Company” means all licensed property and casualty insurance companies, including an entity created pursuant to § § 8-45-101 and 8-45-117, C.R.S. It does not include captive insurance companies licensed under Article 6 of Title 10 or self-insurance pools licensed under Article 44 of Title 8, Section 115.5 of Article 10 of Title 24, or Section 102 of Article 13 of Title 29.
C. “Exempt Commercial Policyholder” shall have the same meaning as defined in Colorado Regulation 5-1-13, 4, C.
D. “Expense Multiplier” means the portion of the rate that includes provisions for expenses, other than loss adjustment expenses, profit and investment income.
E. “On-Rate Level Premium” is the premium that would have been generated if the present rates had been in effect during the entire period under consideration.
F. "Premium" means the amount of money charged a policyholder for an insurance policy.
G. "Prior Approval" is a filing procedure that requires a rate, rule or loss cost change to be affirmatively approved by the Commissioner prior to distribution, release to producers, collection of premium, advertising, or any other use of the rate, rule or loss cost.
H. “Qualified Actuary” is a person who meets the requirements of Colorado Insurance Regulation 1-1-1.
I. "Rate" means the cost of insurance per exposure unit. Rates must include an adjustment to account for expenses, profit, and variations in loss experience, but are prior to any application of individual risk variations based on loss or expense considerations.
J. "Rating Manual" means the rates, schedule of rates, rating plans, rating classifications, territories, rating rules, and any other information which the company uses to determine the final dollar charge for insurance coverage.
K. “Trend” or “Trending” means any procedure for projecting losses to the average date of loss, or of projecting premium or exposures to the average date of writing. Section 5 Rules All rate, rule and loss cost filings shall be submitted electronically by licensed companies, rating organizations and advisory organizations (except for conditions provided by regulation). Failure to supply the information required in Subsections 5(A)(4), 5(A)(5), 5(A)(7), and 5(B)(4) of this regulation would render the filing incomplete. Incomplete filings will be rejected on or before the 15th business day after receipt. Incomplete filings are not reviewed for substantive content. All filings that are not returned on or before the 15th day after receipt will be considered complete. Filings may be reviewed for substantive content, and if reviewed, any deficiency will be identified and communicated to the filing insurer on or before the 30th business day after receipt. Correction of any deficiency, after the 30th business day, will be required on a prospective basis, and no penalty will be applied to a non willful violation identified in this manner. Nothing in this Section 5 shall render a rate filing subject to prior approval by the Division of Insurance unless otherwise subject to prior approval as provided by statute.
A. Rate Filings General Requirements
B. Additional Rate Filing Requirements by Line The following subsections set forth the requirements by separate lines of business that must be complied with in addition to the above general requirements.
The final loss cost multiplier must include a provision for expenses (expense multiplier) and may include an adjustment to the pure premium rate (pure premium rate modification). The final loss cost multiplier is a combination of these two adjustments:
The qualified actuary must state an opinion as to whether the rates are excessive, inadequate or unfairly discriminatory.
C. Rule Filing General Requirements
D. Prohibited Practices The Division of Insurance has determined that certain rating practices lead to excessive, inadequate or unfairly discriminatory rates and are unfair methods of competition and/or unfair or deceptive acts or practices in the business of insurance. Therefore, in accordance with § 10-3- 1110(1), C.R.S., it is considered an unfairly discriminatory practice for a company to include, in any component of a rate, any amount intended to recover losses or expenses incurred in another state or jurisdiction due to any referendum, law or regulation which requires a general reduction in rates. This subsection shall not prohibit the use of national, regional or other industry data as a necessary and actuarially supportable supplement to Colorado data that is not fully credible. Section 6 Severability Noncompliance with this regulation constitutes a violation of § 10-3-1104, C.R.S., and subjects the noncomplying entity to the sanctions specified in § 10-3-1108, C.R.S., and all other sanctions and penalties allowed by law, including the imposition of fines and the suspension or revocation of insurance licenses.
Section 7 Enforcement Noncompliance with this Regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of insurance licenses.
Section 8 Effective date This regulation is effective August 1, 2009.
Section 9 History Regulation 91-1, effective March 1, 1991.
Re-codified as Regulation 5-1-10 on June 1, 1992.
Regulation repealed and re-promulgated, effective February 1, 1999. Amended regulation, effective January 1, 2000.
Amended regulation, effective March 2, 2002.
Amended regulation, effective August 1, 2009.
Regulation 5-1-11 RISK MODIFICATION PLANS Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109, 10-4-401, 10-4-403, 10-4-404, and 10-4-408, C.R.S. Section 2 Scope and Purpose The purpose of this regulation is to provide criteria for the modification of commercial property and casualty manual rates and to establish workers' compensation disclosure requirements. Section 3 Applicability This regulation applies to all insurers writing commercial property and casualty insurance policies, including workers' compensation insurers, licensed to conduct business in this state and Pinnacol Assurance.
Section 4 Definitions A. "Anniversary date" means the annual anniversary of the date of issue of a policy as shown in the policy declaration.
B. "Certified workers' compensation risk management program" means a program which meets the minimum standards outlined in Colorado Insurance Regulation 5-3-1 and is certified with a Cost Containment Certificate by the Colorado Cost Containment Board.
C. "Designated medical provider" means any physician, hospital, clinic or physician of a preferred provider organization network who meets all of the qualifications of a designated medical provider outlined in Regulation 5-3-1, which defines minimum risk management standards for cost containment certification.
D. "Experience rating plan" means any rating plan or system wherein a manual rate for insurance is adjusted or modified based on the past loss experience of the insured.
E. "Improved workers’ compensation loss experience for experience or schedule rated insured business entities" means lower frequency and severity of losses for the last policy period as compared with frequency and severity of losses within the immediate prior policy period. If loss experience is not available for the complete last policy year, losses must be compared for equal periods of time (eight months vs. eight months, ten months vs. ten months, etc.). Whether the risk management program certification credit applies and whether the business entity’s loss experience has improved shall be determined by the insurer prior to granting the cost containment credit. The Colorado Cost Containment Board reviews the business entity’s loss record for the purpose of certification of the risk management program only.
F. "Initial certification date" means the date the risk management program of a business entity is initially certified by the Colorado Cost Containment Board. A risk management program that meets the risk management standards of Colorado Insurance Regulation 5-3-1 shall be initially certified one year after the implementation of the program by the business entity.
G. "Initial effective date of the premium dividend resulting from the implementation of a risk management program" means the annual anniversary date of a workers' compensation policy immediately after the risk management program has been certified by the Colorado Cost Containment Board. If the annual anniversary date is within thirty (30) days of the date a risk has been certified, a grace period for the application of a premium dividend is allowed. However, a grace period, when allowed, must be applied consistently.
H. "Manual rate" means a rate designed to apply on a generic basis to similar risks within the same class, filed by an insurer or rating/advisory organization with the Division of Insurance and made part of the rating manual used by an insurer or rating/advisory organization.
I. "Payroll" means the remuneration paid or payable by the business entity for services of employees. Remuneration is money or substitutes for money including commissions, bonuses, extra pay for overtime, pay for vacations, holidays and sickness, statutory insurance or pension plans, payments for piece work, allowances for tools, the rental value of an apartment, and the value of lodging and meals.
J. "Premium Differential" means an adjustment to the workers' compensation premium when the insured business entity has selected a designated medical provider.
K. "Premium dividend resulting from the implementation of a risk management program" means the credits allowed for business entities which implement a risk management program and comply with the standards established by Colorado Insurance Regulation 5-3-1 and the business entity's loss experience under the risk management program indicates that such premium dividend is warranted.
L. "Premium dividend resulting from rehiring previously injured employees" means the credit arrived at for employers who rehire previously injured employees who sustained permanent partial disabilities.
M. "Rate modification plan" (commonly called Schedule Rating Plan or Individual Risk Premium Modification Plan) means a rating plan or procedure which provides a listing of various risk characteristics or conditions and a range of modification factors which may be applied for these characteristics or conditions to the manual rate of a particular insurance risk. The effect of the modification factor is to increase (debit) or decrease (credit) the manual rate. Rate modification plans exclude merit rating plans and retrospective rating plans.
N. "Rehired employee with permanent partial disabilities" means an employee who sustained permanent partial disabilities and is reemployed by the same employer, not a successor, at the pre-injury wages including any wage increases to which such employee would have been entitled had the employee not been injured.
O. "Renewal date of premium dividend" means each annual anniversary date of a workers' compensation insurance policy after the initial effective date of the premium dividend. Section 5 Rules A. Rate Modification Plans Rate modification plans, justified according to the standards herein, are permitted. However, the commissioner has determined that the use of unjustified rate modification plans is not reasonable, is not objective and is unfairly discriminatory. Therefore, the use of unjustified rate modification plans in rating of commercial property and casualty insurance risks located in Colorado is prohibited.
B. Experience Rating Plans Experience rating plans shall be calculated from at least three complete years of premium or payroll and loss data, except if a lesser time period has been approved by the Commissioner. Experience rating plans cannot be calculated with estimated premiums or payroll. Premium or payroll and loss figures used in the calculation must be verifiable and justifiable.
C. Workers' Compensation Cost Containment Certification and Selection of Designated Medical Provider disclosure All workers' compensation insurers, including Pinnacol Assurance, shall disclose the availability of cost containment certification by the Colorado Workers' Compensation Cost Containment Board and the potential premium savings on the face of the insurance policy or in a separate disclosure form attached as an addendum to the policy. Such disclosure applies regardless of whether or not a risk is experience or schedule rated. Insurers shall require that the insured business entity indicate on a form developed by the insurer, that the business entity is aware of the possible premium dividend if the business entity’s risk management program is certified by the Colorado Cost Containment Board. This form shall be made part of the insured business entity’s underwriting file.
D. Premium Dividend for Certified Risk Management Programs Insured Business Entities Qualifying for Experience and/or Schedule Rating: If an insured business entity qualifies for experience and/or schedule rating under its workers' compensation insurance and the insured business entity has implemented a certified workers' compensation risk management program, the insurer must allow a 5% premium dividend if the loss experience has improved since the last renewal date of workers' compensation insurance. The premium dividend shall be in addition to the maximum schedule rating deviation of 25%. The schedule rating and cost containment discounts shall be applied multiplicatively. Therefore, the maximum schedule rating credit (0.75) multiplied by the cost containment certification premium dividend (0.95) cannot exceed 28.75%.
8% If the insured business entity had one medical loss exceeding $250 in the last year immediately preceding the effective date of the premium dividend.
6% If the insured business entity had two medical losses, each exceeding $250, in the last year immediately preceding the effective date of the premium dividend.
4% If the insured business entity had three medical losses, each exceeding $250, in the last year immediately preceding the effective date of the premium dividend.
2% If the insured business entity had three medical losses, each exceeding $250, and one claim for loss of time in the last year immediately preceding the effective date of the premium dividend.
0% If the insured business entity had more than three medical losses and one claim for loss of time in the last year immediately preceding the effective date of the premium dividend.
Individual underwriting files must contain a copy or electronic record of the insured business entity's Colorado Cost Containment Certificate and historical and current loss statistics, or credible evidence available from the Colorado Division of Workers’ Compensation that such entity qualifies and has received cost containment certification. Any other rating plan which incorporates the characteristics of the plan for "premium dividend" as defined in this regulation, may be substituted for the plan for premium dividend. However, under no circumstance, can such a substitute rating plan allow for credits already reflected in the rates.
E. Premium Differential for Selection of Designated Medical Provider All workers' compensation insurers, including Pinnacol Assurance, must allow a credit of 2.5% as a premium differential of the workers' compensation insurance premium if the insured business entity has selected a designated medical provider. If an insured business entity is eligible for schedule rating, the 2.5% credit must be included in the total schedule credit or debit, subject to the 25% maximum limitation.
F. Workers' Compensation Premium Dividend for Employing Previously Injured Employees with Permanent Partial Disabilities The workers' compensation premium dividend applies to all workers' compensation policies with large or small premiums, except policies subject to minimum premiums. The dividend shall be calculated annually after a policy has expired and shall apply to the premium developed from the payroll of the rehired injured employees who sustained permanent partial disabilities (payroll of rehired employees x manual rates x ratio of rehired employees with permanent partial disabilities to injured employees with permanent partial disabilities). This premium shall be subject to all risk modification credits or debits otherwise applicable under the policy. If any employee is rehired during a policy period or was not rehired for the total policy term, the rehired employee shall be considered as being rehired for the total annual policy period or term. The workers' compensation premium dividend applies to all policies which expire on or after March 1, 1993 and all renewal policies thereafter as long as an injured employee who sustained permanent partial disabilities remains with the same employer. In calculating the premium dividend, insurers shall use the following formula:
P = The actual payroll of reemployed injured employees who sustained permanent partial disabilities multiplied by the manual rate for the classification of the reemployed injured employees. If employees fall into different manual rate classifications, payroll of each employee should be multiplied by the appropriate manual rate. The sum of these would equal P.
D = Amount of premium dividend subject to a maximum of 10% annually. The premium dividend shall be adjusted annually based on the number of injured employees who sustained permanent partial disabilities rehired within the given policy period.
G. Reporting of Pertinent Information Upon the request of the commissioner, an insurer to which this regulation applies, shall submit data to the commissioner establishing the relationship of the aggregate premiums actually charged policyholders by the insurer for each line of commercial insurance to the aggregate premium that would have been produced by the insurer's filed unmodified rates for that line of commercial insurance. A rating/advisory organization may file the data on behalf of the insurer.
H. Rate Compliance Examinations To determine compliance with this regulation the commissioner may order a compliance examination be made of any insurer to which this regulation applies.
I. Filing of Rate Modification Plans Each insurer to which this regulation applies, shall file its rate modification plan (Schedule Rating Plan), its plan for premium dividend or its substitute plan, and the premium differential for the selection of a designated medical provider prior to implementation with the Division of Insurance. Section 6 Severability If any provisions of this regulation or its application to any person or circumstances are for any reason held to be invalid, the remainder of the regulation shall not be affected in any way. Section 7 Enforcement Noncompliance with this Regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of insurance licenses. Section 8 Effective Date This amended regulation is effective on June 1, 2012.
Section 9 History New regulation 88-3, effective 1988 Amended regulation 91-4, effective May 1, 1991.
Re-codified as regulation 5-1-11, effective January 1, 1992. Amended as regulation 5-1-11, effective March 1, 1993.
Amended as regulation 5-1-11, effective April 1, 1997.
Amended as regulation 5-1-11, effective May 1, 2003.
Amended regulation effective June 1, 2012.
Regulation 5-1-12 CONCERNING WARRANTIES AND SERVICE CONTRACTS Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-108(8) and 10-1-109, C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to establish a distinction between a written agreement that is an insurance contract pursuant to § 10-1-102(7), C.R.S. and a written agreement that meets the definition of a written warranty or service contract and is not subject to regulation by the Division of Insurance. The Colorado Division of Insurance has received numerous inquiries regarding contracts which may be insurance and are sold as warranties or service contracts. The definitions and rules contained herein set forth certain conditions which will cause a contract to be considered a contract of insurance, and thereby regulated by the Division of Insurance, and warranty contracts and service contracts which may not be regulated unless specifically addressed in the Colorado statutes, rules and regulations. Section 3 Applicability This regulation applies to written agreements in which services are promised to be rendered or the purchaser of property, personal or real, is guaranteed repair, replacement or indemnification for such repair or replacement of the property on the discovery of defects, loss, or damage to the property during a specified or unlimited period of time after purchase.
This regulation applies to written agreements which provide a benefit including but not limited to, prepaid legal, accounting, or other services.
This regulation shall not apply to contracts issued as warranties and/or service contracts regulated by § § 42-10-103, et. seq., 42-11-101, et. seq. and 12-61-602, et. seq., C.R.S. This regulation shall not apply to written agreements providing health benefits or health service plans. Section 4 Definitions For the purposes of this regulation:
Section 5 Rule A service contract will not be a contract of insurance if the issuer has the ability to and provides the services or meets the following conditions:
A. Has a closed panel of providers who agree to provide all the services promised to any contract holder of the plan.
B. The closed panel must be responsible for providing services whether or not the issuer, which collects the dues and pays the providers, becomes bankrupt or otherwise ceases to function in the anticipated manner.
C. The closed panel of providers must have a factual and realistic capability to provide all the services obligated to the contract holder.
D. There must be no indemnification contracted for by either the administrative unit or the providers of the plan for services or risk contingencies performed by any other entity outside the closed panel. The issuer of these contracts may be the supplier, an individual, entity or association. Associations may issue service contracts only if the association is solely comprised of members who will provide the services.
A written agreement issued by the supplier of a product which meets the definition of a written warranty under this regulation is not a contract of insurance. Any other person who issues a written warranty, promise or contract to a product buyer for consideration is engaged in the business of insurance. A contract which agrees or promises to indemnify the purchaser directly or promises to indemnify others for providing such agreed upon services and meets the definition of insurance as set forth in § 10-1- 102(7), C.R.S., is a contract of insurance.
If a written agreement is such that any part of the agreement is considered to be a contract of insurance, then the entire agreement shall be considered to be a contract of insurance. A written agreement which would otherwise be considered a contract of insurance with the exception of not having charged an explicit consideration, is a contract of insurance if there is any consideration received through other provisions or related agreements. Section 6 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 7 Enforcement Non compliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of license. Section 8 Effective Date This regulation is effective June 1, 2012.
Section 9 History Regulation 91-9 was effective August 1, 1991.
Regulation 91-9 was repealed and replaced by Regulation 5-1-2, effective July 1, 1993. Regulation 5-1-12 was amended, effective January 1, 2002. Regulation 5-1-12 was amended, effective June 1, 2012.
AMENDED REGULATION 5-1-13 EXEMPTIONS FROM RATE AND FORM FILING REQUIREMENTS FOR INSURERS PROVIDING COVERAGE TO EXEMPT COMMERCIAL POLICYHOLDERS Section 1 Authority Section 2 Basis and Purpose Section 3 Applicability and Scope Section 4 Definitions Section 5 Rules Section 6 Enforcement Section 7 Severability Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated pursuant to § § 10-1-109 and 10-4-1402, C.R.S. Section 2 Basis and Purpose The purpose of this regulation is to establish and implement rules concerning the definition and qualifications of an exempt commercial policyholder, the definition and qualifications of a risk manager, disclosure requirements for persons claiming status as exempt commercial policyholders, disclosure requirements for policies of Type II insurance issued to exempt commercial policyholders, and the data, documents, reports and other information to be maintained by insurers who are authorized to issue Type II insurance to exempt commercial policyholders. This regulation is made necessary by enactment into law of Colorado House Bill 99-1310, which requires the Commissioner to promulgate rules necessary to implement and administer § 10-4-1401 et. seq., C.R.S.
Section 3 Applicability and Scope This regulation shall apply to all insurers authorized to issue Type II insurance (as defined below in Section 4, Rules, A. 7.) to exempt commercial policyholders. Section 4 Definitions A. “Affiliated group” means two or more persons who are owned or controlled, directly or indirectly, by one of the constituent members of the group. As used in this definition, the term “controlled” means possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, or otherwise.
B. “Anti-competitive conduct” means engaging in, attempting to engage in, or threatening to engage in any conduct to monopolize or attempt to monopolize or to unreasonably restrain trade or commerce, or to combine or conspire with any other person to monopolize or attempt to monopolize or to unreasonably restrain trade or commerce in any part of the business of insurance.
C. ” Exempt commercial policyholder” means any person who applies for or procures any kind of Type II insurance through the use of a risk manager employed or retained by such person, and meets at least one of the following qualifications:
D. “Person” has the same meaning set forth in § 2-4-401(8), C.R.S.
E. “Policyholder” means an exempt commercial policyholder.
F. “Risk manager” means an employee of the exempt commercial policyholder, or a third-party consultant retained by the policyholder who provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and the purchase of insurance, and who possesses at least one of the following credentials:
Section 5. Rules A. Disclosure Requirements
B. Requirements for Maintaining Data, Documents, Reports, and Other Information
Section 7 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of the regulation shall not be affected. Section 8 Effective Date This regulation shall become effective on August 1, 2006. Section 9 History New Regulation effective January 15, 2000.
Amended regulation effective August 1, 2006.
Amended Regulation 5-1-14 Penalties For Failure To Promptly Address Property And Casualty First Party Claims Section 1. Authority Section 2. Background and Purpose Section 3. Applicability and Scope Section 4. Rules Section 5. Enforcement Section 6. Severability Section 7. Effective Date Section 8. History Section 1 . Authority This regulation is promulgated pursuant to § § 10-1-109 and 10-3-1110, C.R.S. Section 2 . Background and Purpose Section 10-3-1110(2), C.R.S., authorizes the Commissioner of Insurance to promulgate rules and regulations with respect to the payment of benefits under group and individual contracts of property or casualty coverage. The purpose of this regulation is to describe the procedure and circumstances under which penalties will be imposed for failure to make timely decisions and/or payment on first party claims. Section 3 . Applicability and Scope The Colorado Reparations (No-Fault) Act was repealed effective July 1, 2003. Automobile insurance policies with personal injury protection (PIP) benefits issued or renewed prior to July 1, 2003 will continue to incur PIP claims and disputes on such claims until PIP benefits do not apply any longer. This regulation applies to all first party property or casualty claims, except as provided pursuant to the Colorado Auto Accident Reparations Act, Part 7 of Article 4 or Title 10, C.R.S. Section 4 . Rules A. Timely Decisions and Payment of Benefits Pursuant to § 10-3-1110(2), C.R.S.
In addition to such penalties payable to the claimant, the Commissioner of Insurance, after notice and hearing, may assess a civil penalty against any insurer of $100 per day for each day benefit payments are delayed more than sixty (60) days after a valid and complete filing of the claim unless there is a reasonable dispute between the parties concerning such claim.
In all actions initiated under this regulation, the insured shall have the burden of proving to the Commissioner of Insurance that he/she submitted a valid and complete claim to the insurer. The insurer shall have the burden of proving to the Commissioner of Insurance that a reasonable dispute existed.
If it is determined that benefits are due to the insured, the insurer must issue a payment to the insured within sixty (60) days of a valid and complete claim being received, if all the conditions in the definition herein are met.
In the event of a significant catastrophe resulting in multiple claims, an insurer may notify the Commissioner of Insurance of the nature and extent of the catastrophe and request a deviation or exemption from this regulation.
B. Reasonable Investigation The Commissioner of Insurance recognizes that the scope of an investigation can be determined, in part, to be reasonable based on the terms and conditions of the policy and the facts and circumstances of each claim. It may include, but is not limited to:
Documentation that a reasonable investigation has been conducted shall be maintained in the claim file. Such documentation may include:
Section 10-3-1104(1)(h)(III), C.R.S., requires insurers to adopt and implement reasonable standards for the prompt investigation of claims.
When an investigation is incomplete or is otherwise continued and the insurer has not paid the claim within the time required under section 3., A. above (sixty (60) days after receipt of a valid and complete claim), the insurer shall immediately notify the insured or the insured's representative, if applicable, of the reason(s) the claim has not been paid. Additionally, if the claim is not paid within the time requirement under section 3., A., above, the insurer shall, every thirty (30) days thereafter, send to the insured or the insured's representative a letter setting forth the reason(s) additional time is needed for investigation. This requirement is not intended to alter any terms of the contract between the insurer and insured regarding their respective rights, duties, and obligations and the law involving such matters. If the claim has not been paid because an investigation is underway, the insurer shall document in the claim file the actions being taken to investigate the claim and the efforts being made to promptly conclude the investigation.
The claim file documentation required by this regulation will be reviewed by the Division of Insurance during an investigation of a complaint or during a market conduct examination to determine if the requirements of § 10-3-1104(l)(h), C.R.S. and this regulation have been met. Section 5 . Enforcement Noncompliance with this regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines and/or suspension or revocation of license. Section 6 . Severability In the event any part of this regulation is determined to be invalid, the remainder of the regulation shall not be affected thereby.
Section 7 . Effective Date This regulation is effective February 1, 2004.
Section 8 . History New Regulation 5-1-14 effective May 1, 2001.
Amended Regulation effective December 1, 2001.
Amended Regulation effective February 1, 2004.
Regulation 5-1-15 NOTIFICATION TO ADDITIONAL INSUREDS WHOSE INTERESTS ARE AFFECTED BY A CLAIM UNDER A GENERAL LIABILITY POLICY Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Rules Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated pursuant to § § 10-1-109 and 10-1-131, C.R.S. Section 2 Scope and Purpose The purpose of this regulation is to implement rules concerning notification to additional insureds whose interests are affected by a claim on a general liability policy. Section 3 Applicability This regulation shall apply to all insurers authorized to issue general liability policies in the state of Colorado.
Section 4 Definitions A. “General liability policy” means any insurance policy that provides insurance against negligent acts or omissions related to any contractor or completed operations activity.
B. “Additional insured by endorsement” means a person or entity that is named on an endorsement to the general liability policy.
C. “Reasonable period of time” means within ninety (90) calendar days after a liability claim is received, provided the insurer is able to identify the additional insured by endorsement based on a review of the records of the insurance company or information obtained from the named insured. Section 5 Rules Notice Requirements A. An insurer shall notify any additional insured by endorsement on a general liability policy, whose interests are affected by a liability claim, of the results of the insurer's investigation of such claim and the status of the claim within a reasonable period of time.
B. Notice to the additional insured of the results of the insurer's investigation of the claim and the status of the claim shall be satisfied by providing:
C. A statement of the applicable policy language shall be a sufficient statement of an insurer's reason for denial of coverage.
D. In the event a copy of the reservation of rights letter has been sent to the additional insured by endorsement pursuant to subparagraph 3, and coverage is subsequently confirmed or denied, notice pursuant to subparagraphs 1 or 2 shall be given within ninety (90) days after such coverage determination.
E. This regulation shall not apply to claims under a general liability policy upon which a lawsuit has been filed.
Section 6 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 7 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 8 Effective Date This regulation is effective August 1, 2012.
Section 9 History New Regulation, effective May 1, 2001.
Amended Regulation, effective January 1, 2007.
Amended Regulation, effective August 1, 2012.
Regulation 5-1-16 Repealed effective 02/01/2005 Repealed effective 02/01/2005 New Regulation 5-1-17 Availability of Fire Insurance During Wildfires Section 1 Authority This Regulation is promulgated under the authority of § § 10-1-109 and 10-4-110.9(4), C.R.S. Section 2 Basis and Purpose The purpose of this Regulation is to provide a rule to implement standards concerning the availability of fire insurance during wildfires within a federally designated disaster area in Colorado. The rule applies to all insurers licensed to conduct business in this state. Section 3 Rule A. Fire Insurance Policy Insurers are prohibited from refusing to issue fire insurance policies for property located within a federally designated disaster area, so designated because of wildfires, based on such property's zip code, county location, or distance from any wildfire. For the purpose of this rule a fire insurance policy is a policy of insurance on real and personal property which includes a non-commercial dwelling fire, homeowners, tenant homeowners and mobile homeowners policy.
B. Immediately Threatened Area Insurers shall not refuse to issue a non-commercial dwelling fire, homeowners, tenant homeowners or mobile homeowners policy on property located within a federally designated disaster area, so designated because of existing wildfire where such refusal is based on the property's zip code, county location, or distance from any wildfire unless the property is located within an immediately threatened area as designated by the appropriate state, local or federal official. Absent a written determination by a government official, or a determination otherwise published by a government official, of the area defined as an immediately threatened area, such term shall mean the area under a lawful order to evacuate or an area prepared to be evacuated. An evacuation order may, but need not, be identified on a government website.
C. Reasonable Actions to Reduce the Risk of Fire Insurers shall not refuse to renew an existing non-commercial dwelling fire, homeowners, tenant homeowners or mobile homeowners policy within an area that has been declared a federally designated disaster area for any reason that is related to existing wildfires. However, insurers as a condition of such renewal may require a property owner to take reasonable actions to reduce the risk of fire to such property. Reasonable actions to reduce the risk of fire include but are not limited to requiring the property owner to provide a defensible space around the structure as defined by reasonable underwriting guidelines of the insurer which are applied consistently by the insurer. Section 4 Enforcement Noncompliance with this Regulation may result, after proper notice and hearing, in the imposition of any lawful sanctions including the imposition of fines and suspension or revocation of license. Section 5 Severability If any provision of this Regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the Regulation shall not be affected thereby. Section 6 Effective Date This Regulation will be effective March 2, 2003.
Section 7 History Issued as new Regulation 5-1-17, effective March 2, 2003. Regulation 5-2-1 Repealed Effective 06/01/2012.
Regulation 5-2-2 CONCERNING RENEWAL OF AUTOMOBILE INSURANCE POLICIES – EXCLUDED NAMED DRIVERS Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Rules Section 5 Severability Section 6 Enforcement Section 7 Effective Date Section 8 History Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109(1) and 10-4-601.5, C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to require each renewal policy of automobile insurance to disclose excluded named drivers as applicable.
Section 3 Applicability This regulation applies to all complying policies of automobile insurance. Section 4 Rules Each insurer renewing a complying policy of automobile insurance as defined in § 10-4-601(2), C.R.S., which policy excludes a named driver under the provisions of § 10-4-630, C.R.S., shall by conspicuous printed notice re-notify the named insured at the time of each policy renewal. Failure to so re-notify the named insured of an excluded driver at the time of policy renewal shall make such exclusion void for all policy coverage.
Section 5 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 6 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 7 Effective Date This regulation shall become effective on July 1, 2012. Section 8 History Originally issued as Regulation 78-9, effective June 11, 1979. Re-codified as Regulation 5-2-2, effective June 1, 1992. Regulation Amended, effective May 1, 2003.
Regulation Amended, effective February 4, 2004.
Regulation Amended, effective February 1, 2006.
Amended Regulation 5-2-2, effective July 1, 2012.
Regulation 5-2-3 Repealed Effective 06/01/2012 Regulation 5-2-5 Repealed Effective 06/01/2012 Regulation 5-2-6 Repealed Effective 06/01/2012 Regulation 5-2-7 Repealed Effective 06/01/2012 Amended Regulation 5-2-8 Timely Payment of Personal Injury Protection Benefits Section 1. Authority Section 2. Background And Purpose Section 3. Applicability and Scope Section 4. Rules Section 5. Enforcement Section 6. Severability Section 7. Effective Date Section 8. History Section 1 . Authority This regulation is jointly promulgated by the Commissioner of Insurance and the Executive Director of the Department of Revenue pursuant to § § 10-1-109, 10-4-704, 10-4-708 (1.3) . (effective until July 1, 2003 except for claims incurred under policies lawfully in effect as described in this regulation), and § 10-3- 1110(1), C.R.S.
Section 2 . Background And Purpose The purpose of this regulation is to provide rules for the prompt investigation and timely payment of personal injury protection (PIP) benefits. Additionally, the regulation sets forth the requirements for establishing proof of the fact and amount of expenses incurred, provides for notices by insurers, and makes certain acts of insurers presumptive unfair or deceptive acts or practices. This regulation is not intended to define reasonable and necessary expenses as such terminology is used in the Act.
Section 3 . Applicability and Scope The Colorado Reparations (No-Fault) Act was repealed effective July 1, 2003. Automobile insurance policies with personal injury protection (PIP) benefits issued or renewed prior to July 1, 2003 will continue to incur PIP claims until such benefits do not apply any longer. This regulation applies to claims occurring under No-Fault Policies issued prior to July 1, 2003.
Section 4 . Rule A. PROMPT INVESTIGATION OF PIP CLAIMS Section § 10-3-1104 (l)(h)(III), C.R.S., requires insurers to adopt and implement reasonable standards for the prompt investigation of claims. An insurer is also required to promptly investigate a claim while it is accumulating claim's expense.
Whenever an insurer requires that an application for benefits form be submitted by an injured party, the insurer shall forward the form to the injured party upon notification of me injury. When an investigation is incomplete or is otherwise continued, the insurer shall, within 30 days after the documents are received as described in C. below and every 30 days thereafter, send to the claimant or the claimant's representative, and the health care provider, if applicable, a letter setting forth the reasons additional time is needed for investigation.
Where additional information is required to complete an investigation, the insurer shall request such information, specifically listing the items needed to complete the investigation. A copy of such request shall be delivered to the claimant, the claimant's representative, the health care provider or other person or entity most likely in possession of the required information.
B. PROMPT PAYMENT OF PIP BENEFITS Section § 10-4-708(1), C.R.S. provides that benefits under the coverages enumerated hi § 10-4-706, C.R.S. are overdue if not paid within 30 days after the insurer receives reasonable proof of the fact and amount of the expenses incurred.
Section § 10-4-708(1), C.R.S., allows for the accumulation of claims expense for periods not exceeding one month and provides that benefits are not overdue if paid within 15 days after the end of a defined period of accumulation. An insurer is permitted by this statute to pay a bill within 15 days after the end of a defined accumulation period only when there is a reasonable likelihood that multiple providers are involved and more than one bill is received during the accumulation period.
C. REQUIREMENTS ESTABLISHING PROOF OF THE FACT AND AMOUNT OF EXPENSES INCURRED
D. NOTICE REQUIREMENTS If an insurer does not pay a claim for benefits under § 10-4-706, C.R.S. within 30 days of receipt of the appropriate documents described in this regulation and as set forth in § 10-4-708, C.R.S., the insurer shall immediately notify the PIP claimant or the claimant's representative and the health care provider, if applicable, of the reason(s) the claim has not been paid. If the claim has not been paid because an investigation is underway, the insurer shall document in the claim file the actions being taken to investigate the claim and the efforts being made to promptly conclude the investigation.
E. UNFAIR METHOD OF COMPETITION AND UNFAIR OR DECEPTIVE ACTS OF PRACTICES IN THE BUSINESS OF INSURANCE Pursuant to § 10-3-1104(l)(h)(III) and (IV), C.R.S., the following are presumptive violations of said sections:
F. RECORDS OF HEALTH CARE PROVIDERS AND POLICY CONTRACT COMPLIANCE Nothing herein shall preclude an insurer from requesting or obtaining medical records from a health care provider or to negate a contractual requirement that an injured party comply with a valid condition in the policy regarding eligibility for receipt of benefits.
G. DOCUMENTATION The claim file documentation required by this regulation will be reviewed by the Division of Insurance during an investigation of a complaint or during a market conduct examination to determine if the requirements of § § 10-4-708(1) and 10-3-1104(1) (h), C.R.S. have been met. Section 5 . Enforcement Noncompliance with this regulation may result, after proper notice and hearing, in the imposition of any lawful sanctions including the imposition of fines and suspension or revocation of license. Section 6 . Severability If any provision of this regulation is for any reason held to be invalid, the remainder of the regulation shall not be affected.
Section 7 . Effective Date This amended regulation is effective on February 1, 2004. Section 8 . History Issued as Regulation 5-2-8, effective November 1, 1997. Amended effective September 1, 2000.
Amended effective February 1, 2004.
Amended Regulation 5-2-9 - Personal Injury Protection Examination Program Section 1 Authority Section 2 Background and Purpose Section 3 Applicability and Scope Section 4 Rule Section 5 Enforcement Section 6 Severability and Scope Section 7 Effective Date Section 8 History Section 1 Authority This regulation is promulgated by the Commissioner under the authority granted in § § 10-1-109, and 10- 4-706(6)(a), C.R.S.2002 (effective until July 1, 2003 except for claims incurred under policies lawfully in effect as described in this regulation).
Section 2 Background and Purpose The purpose of this regulation is to provide rules for the PIP examination program whenever disputes arise on PIP claims.
Section 3 Applicability and Scope The Colorado Reparations (No-Fault) Act was repealed effective July 1, 2003. Automobile insurance policies with personal injury protection (PIP) benefits issued or renewed prior to July 1, 2003 will continue to incur PIP claims and disputes on such claims until PIP benefits do not apply any longer. Section 4 Rule All statutory cites contained in this section reflecting § § 10-4-701 through 10-4-726, C.R.S. 2002, shall refer to the statutes in effect as of June 30, 2003.
A. DEFINITIONS
B. STANDARDS AND CONDITIONS FOR MEMBERSHIP ON THE PIP EXAMINATION REVIEW PANEL An applicant for panel membership shall complete the PIP IME registration form as required by the IME Program Administrator. By submitting a completed registration form for panel membership to the IME Program Administrator, a health care practitioner certifies he/she:
C. REQUESTING A PIP EXAMINATION
D. SELECTION OF THE PANEL MEMBER AND PREPARATION OF RECORDS
E. SCHEDULING THE PIP EXAMINATION AND SUBMISSION OF RECORDS
F. REPORT BY PIP EXAMINER
Section 7 Effective Date This regulation is effective January 1, 2007.
Section 8 History Originally issued as Emergency Regulation 96-E-5, effective January 1, 1997. Emergency Regulation 97-E-2, effective April 1, 1997.
Emergency Regulation 97-E-3, effective June 30, 1997.
Regulation 5-2-9, effective September 1, 1997.
Amended Regulation 5-2-9, effective January 1, 1999.
Amended Regulation 5-2-9, effective September 1, 2000.
Amended Regulation 5-2-9, effective February 1, 2004.
Amended Regulation 5-2-9, effective January 1, 2007.
Regulation 5-2-11 Repealed Effective 06/01/2012 Regulation 5-2-12 CONCERNING AUTOMOBILE INSURANCE CONSUMER PROTECTIONS Section 1 Authority This Regulation is promulgated by the Commissioner of Insurance under the authority of § § 10-1-109, 10-4-601.5, 10-4-625 and 10-4-628(4), C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to interpret and implement the provisions of Part 6 of Article 4 of Title 10 of the Colorado Revised Statutes. In addition, this regulation provides rules governing the rejection of coverage, cancellation, nonrenewal, increase in premium, and reduction in coverage on "complying policies" of automobile insurance.
Section 3 Applicability This regulation shall apply to all insurers that issue or renew automobile coverage on or after July 1, 2003, pursuant to Part 6 of Article 4 of Title 10 of the Colorado Revised Statutes. Section 4 Definitions A. "Complying policy" shall have the same meaning as the definition found in § 10-4-601(2), C.R.S.
B. "Incident" means an event or occurrence that results in an accident or motor vehicle conviction. An accident resulting in a motor vehicle conviction shall be treated as a single incident or event.
C. "Motor vehicle conviction" means an adjudication of guilt to a traffic offense, whether based upon a trial resulting in conviction or a plea of guilty or no contest’ to the original charge or to a reduced charge.
D. "Week" means any seven (7) consecutive calendar days.
E. "Prominently display" means using bold characters, underlining, italicizing or using some other means of ensuring the information is distinct and easily recognized by the recipient of the document.
F. "Quarterly premium payment" means one fourth (1/4) of the gross annual premium plus additional service charges, if any, for policies written for a term of one year or longer, or one half (1/2) of the gross six months premium, plus additional service charges, if any, for policies written for a six- month term.
G. "Usage based insurance" means a rating structure that is based, in whole or in part, on the electronic accumulation of data through a device installed in a motor vehicle in which an individual’s daily driving habits are used to determine a premium rate in accordance with a rating plan that has been filed with the Division.
Section 5 Rules A. Installment Premium Payments
B. Rules Limiting Insurers' Action To Refuse To Write, Cancel, Nonrenew, Increase Premium, Surcharge Or Reduce Coverages
As used in h and i, a conviction, accident, or payment made for the same occurrence shall be considered as one incident.
Section 6 Enforcement Noncompliance with this regulation may result, after notice and hearing, in the imposition of any lawful sanction including the imposition of fines and suspension or revocation of license. Section 7 Severability If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision shall not be affected thereby.
Section 8 Effective Date This regulation is effective January 1, 2011.
Section 9 History Originally issued effective February 1, 2004.
Amended regulation effective December 1, 2004.
Amended regulation effective January 1, 2007.
Amended regulation effective August 1, 2007.
Amended regulation effective September 1, 2009.
Amended Regulation effective January 1, 2011.
Regulation 5-2-13 Repealed Effective 06/01/2012 Regulation 5-2-14 [Reserved] Regulation 5-2-15 CONCERNING CONSUMER PROTECTION FOR VEHICLE VALUATION AND RENTAL REIMBURSEMENT Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Rules Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated under the authority of § § 10-1-109, 10-3-1110 (2), 10-4-601.5 and 10-4- 639 (3) (4), C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to establish standards for payment of claims for vehicle rental and collision damage waivers, and for valuation of total loss claims under private passenger auto insurance policies.
Section 3 Applicability This regulation shall apply to all insurers that provide automobile insurance policies. Section 4 Definitions A. “Total Loss” means the condition of a motor vehicle when it is damaged or destroyed to such an extent that the insurer determines it cannot be rebuilt or repaired to its condition prior to the loss; or the cost of the loss (including, but not limited to, rental expenses, specialized labor and part availability) make the repairs of the vehicle uneconomical.
B. “Valuation” means the method of determining the worth of property that has been lost or damaged.
C. “Third-Party Claimant” means the individual other than the insured or the insurer who has incurred a loss or is entitled to receive a benefit payment as a result of the negligent acts or omissions of the insured.
D. “Collision Damage Waiver” means the special property damage coverage purchased by an individual renting an automobile under which the rental company waives any right to recover property damage to the automobile from that individual regardless who is at fault. Section 5 Rules A. Total Loss Claims
B. Payment For Temporary Replacement of Damaged Motor Vehicles
C. Failure to comply with this regulation constitutes an unfair or deceptive act or practice in the business of insurance.
Section 6 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 7 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 8 Effective Date This regulation shall become effective on August 1, 2012. Section 9 History New regulation issued effective December 1, 2004.
Amended regulation effective August 1, 2012.
Regulation 5-2-16 DISCLOSURE REQUIREMENTS FOR PRIVATE PASSENGER AUTOMOBILE POLICIES Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Definitions Section 5 Rules Section 6 Severability Section 7 Enforcement Section 8 Effective Date Section 9 History Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10 1 109, 10-4-111(5), 10-4-601.5, 10-4-636, and 10-4-641(1) C.R.S. Section 2 Scope and Purpose The purpose of this regulation is to interpret and implement the provisions of § § 10 4 111 (1) and (5) and 10-4-636, of the Colorado Revised Statutes, to provide summary disclosure requirements and the summary disclosure form for private passenger automobile insurance. Section 3 Applicability This regulation shall apply to all licensed insurers or producers in Colorado issuing private passenger automobile policies pursuant to Part 6 of Article 4 of Title 10 of the Colorado Revised Statutes. Section 4 Definitions A. "Adequate Evidence" shall have the same meaning as set forth in § 10-4-636(3)(b), C.R.S.
B. "Automobile" for the purposes of this regulation and summary disclosure shall include motor vehicles, low-power scooters, and motorcycles as defined in § § 10-4-601 (6) and 42-1-102 (48.5) and (55), C.R.S.
C. "Commercial Automobile Insurance Policy" means any policy issued pursuant to the requirements of § § 10-4-1401 et seq., C.R.S., where the organization or entity qualifies as an exempt commercial policyholder and the requirements outlined in the foregoing statute and Division Regulation 5-1- 13 have been met.
D. "Initial Insurance Purchase" means when the application for insurance is submitted and payment is made to the insurer or producer.
E. "Optional or Enhanced Coverages" means those coverages that will result in an increased premium to an insured’s policy, and for which the express consent of the insured is required, but does not include uninsured or underinsured motorist coverage or medical payments coverage.
F. "Summary Disclosure Form" means the form that contains an explanation of the major coverages and exclusions of an insurer’s automobile insurance policy, together with a recitation of general factors considered in cancellation, nonrenewal and increase-in-premium situations. Section 5 Rules A. Summary Disclosure Form
B. Disclosure Requirements
C. Additional Disclosure Requirements
D. Optional and Enhanced Coverages
Section 6 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 7 Enforcement Noncompliance with this Regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of license. Among others, the penalties provided for in §10-3-1101 et seq., C.R.S. may be applied.
Section 8 Effective Date This regulation shall become effective January 1, 2012. Section 9 History New regulation effective January 1, 2007.
Amended regulation effective January 1, 2008.
Amended regulation effective January 1, 2009.
Amended regulation effective January 1, 2012 COLORADO PRIVATE PASSENGER AUTOMOBILE INSURANCE - SUMMARY DISCLOSURE FORM This summary disclosure form is a basic guide to the major coverages and exclusions in your policy. It is a general description. It is not a policy of any kind. All coverage is subject to the terms, conditions, and exclusions of your policy and all applicable endorsements. PLEASE READ YOUR POLICY FOR COMPLETE DETAILS. THIS SUMMARY DISCLOSURE FORM SHALL NOT BE CONSTRUED TO REPLACE ANY PROVISION OF THE POLICY ITSELF. Complete details include, but are not limited to, information on the method we use to calculate your unearned premium (e.g., pro rata or short rate), if you should cancel your policy before the next renewal. This summary disclosure form also provides some of the factors considered for cancellation, nonrenewal and increase-in-premium. These factors are general in nature. They do not represent the only reasons a policy may be cancelled or changed. Please contact us or your agent for further information.
I. REQUIRED COVERAGE - Liability Colorado law requires you to have liability coverage on your automobile. This coverage pays bodily injury to another person and property damage to another’s property that are the result of an accident in which you are found to be at fault.
Coverage is not provided for any automobile owned by you or a resident relative that is not insured for liability under your policy. There is no coverage for intentional acts. Please read your policy for other conditions and exclusions.
II. OTHER COVERAGES A. Uninsured and Underinsured Motorist Coverage Uninsured and underinsured motorist coverage will be included in your policy unless you reject it in writing.
B. Physical Damage Coverage – Collision and Comprehensive You must be offered collision coverage.
Please read your policy for other conditions and exclusions.
C. Medical Payments Coverage Medical payments coverage of $5,000 will be included in your policy unless you reject it. You may reject the coverage in writing or in the same method in which you applied for the policy. Medical payments coverage is not required to be offered on motorcycles, low-power scooters, off- road vehicles or other miscellaneous vehicles.
We must prioritize the payment of your benefits in a manner consistent with Colorado insurance law.
Injuries to you that are the result of an at-fault accident will not be paid, under an automobile insurance policy, unless medical payments coverage is purchased. Please read your policy for other conditions and exclusions.
D. Uninsured Motorist Property Damage Coverage This coverage pays for damages to your automobile caused by an at-fault owner of an uninsured automobile.
Please read your policy for other conditions and exclusions.
III. CANCELLATION, NONRENEWAL AND INCREASE IN PREMIUM A. Cancellation During the first 59 days we may cancel your policy for any reason not prohibited by law. After your policy has been in effect for more than 59 days, we may cancel your policy for any of the following reasons:
B. Nonrenewal We may choose to non-renew your policy. Some examples of reasons for nonrenewal include, but are not limited to:
C. Increase in Premium We may increase your premiums for the following reasons:
The above list of reasons is not all inclusive. There may be other changes that result in an increased premium.
We may add a surcharge or remove an accident free discount because of an at-fault accident or traffic conviction. Under this circumstance you will receive a statutory right to protest this action. Regulation 5-3-1 WORKERS COMPENSATION RISK MANAGEMENT REGULATION Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of Sections 10-1-109 and 10-4-408, C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to provide standards for risk management programs and services required to be offered by workers compensation insurers, licensed to conduct business in this state, including Pinnacol Assurance.
Section 3 Applicability This regulation shall apply to all insurers authorized to issue worker’s compensation insurance policies in Colorado including Pinnacol Assurance.
Section 4 Definitions A. "Anniversary date" means the annual anniversary of the date of issue of a workers compensation insurance policy as shown in the policy declaration.
B. "Certified workers compensation risk management program or service" means a program or service which meets the minimum standards of this regulation and is certified by the Colorado Cost Containment Board located at the Colorado Division of Labor and Employment.
C. "Initial certification date" means the date the risk management program of a business entity is initially certified by the Colorado Cost Containment Board. A risk management program that meets the risk management standards of this regulation will be initially certified one year after the implementation of the program by the business entity.
D. "Re-certification date" means each annual anniversary date of the initial certification.
E. "Risk management" means the process that uses physical and human resources to prevent or reduce losses.
F. "Risk management service" means such activities as loss exposure identification, determination of the size of exposure and the degree of hazard, loss control services, and management services. Section 5 Rules A. Minimum Risk Management Standards A risk management program must comply with the following standards:
B. Risk Management Services All workers compensation insurers and Pinnacol Assurance are required to provide risk management services which include identifying loss exposures, measuring the size of the exposures and in determining varying degrees in hazards. Furthermore, insurers are to assist insured business entities in selecting techniques to handle exposures, and in establishing and implementing a risk management program which meets the minimum standards of this Regulation.
Section 6 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 7 Enforcement Non compliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines and/or suspension or revocation of license.
Section 8 Effective Date This regulation is effective June 1, 2012.
Section 9 History Issued as new regulation 91-5, effective May 1, 1991 Re-codified as regulation 5-3-1, effective June 1, 1992 Amended regulation 5-3-1, effective March 2, 2003 Amended regulation 5-3-1, effective June 1, 2012 Amended Regulation 5-3-2 Workers' Compensation Insurance Data Reporting Regulation Section l Authority This regulation is promulgated pursuant to Sections 10-1-109, 10-4-404, and 8-44-113, C.R.S., authorizing the commissioner to adopt rules regarding the reporting of workers' compensation claims data.
Section 2 Basis and Purpose The purpose of this regulation is to enhance the ability of the commissioner to determine the nature and sources of workers' compensation insurance costs in this state by establishing standards for reporting of the kinds of data required to be reported by workers' compensation insurers licensed to conduct business in Colorado and Pinnacol Assurance.
Section 3 Rules A. Definitions
B. Powers and Duties The commissioner may enter into agreements with any qualified data collection service corporation, association or other entity to undertake the compilation and analysis of data collected pursuant to this regulation.
C. Statistical Reporting Every insurer licensed to transact business of workers' compensation insurance in this state, who writes at least 0.1% of the total Colorado workers' compensation premium market share, and Pinnacol Assurance shall report its statistical experience to at least one of the statistical agents designated by the commissioner. The statistical agent designated by the commissioner shall provide statistical data definitions to insurers and Pinnacol Assurance at time of survey.
D. Annual Data Reporting At least annually, insurers and Pinnacol Assurance shall submit to surveys by a statistical agent Upon inclusion in a survey, a particular claim shall be surveyed until closed or for eight years, whichever period is shorter. In order to prevent duplication of effort, any existing sources of data may be utilized provided that the source (e.g., statistical agent or the Division of Labor and Employment) can attest to the validity and accuracy of the data it submits.
E. Basic Claim Survey In accordance with statistical plans adopted by the commissioner, the annual survey data shall include the following elements on each claim:
Product liability Automobile liability Other (2) Special fund recoveries Subsequent Injury Fund Apportionment between carriers Apportionment for preexisting injury
*** If the IAIABC is to provide this information, ANSI codes should be used. If the information will come from the National Council on Compensation Insurance (NCCI), then NCCI codes should be used. **** Since payment reports are generally net, recoveries must be added to determine gross payments. Section 4 Exemption Upon application by a statistical agent or an individual insurer, the commissioner may allow the submission of a report or statistical data at a specified later date if the submission of the report or data on the date required by this regulation would create substantial hardship on the statistical agent or insurer. Section 5 Confidentiality Any report of information relating to a particular claim shall be confidential and shall not be revealed by the commissioner, except that the commissioner may make compilations including this experience. Section 6 Enforcement Noncompliance with this regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines and/or suspension or revocation of license. Section 7 Severability If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation shall not be affected thereby. Section 8 Dissemination Each insurer and Pinnacol Assurance are instructed to distribute a copy of this regulation to all personnel snagged in activities requiring knowledge of this regulation, and to instruct them as to its scope and operation.
Section 9 Effective Date This regulation is effected March 2, 2003.
Section 10 History Issued as new regulation 91-6, effective September l, 1991. Re-codified as regulation 5-3-2, effective June l, 1992. Amended regulation 5-3-2, effective March 2, 2003.
Regulation 5-3-3 CONCERNING WORKERS’ COMPENSATION DEDUCTIBLE POLICIES IN EXCESS OF $5,000 Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § 10-1-109(1) and (2), C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to promulgate rules for payments to the Major Medical Insurance Fund created in § 8-46-202, C.R.S., the Subsequent Injury Fund created in § 8-46-101, C.R.S., the Workers’ Compensation Cash Fund created in § 8-44-112 (7), C.R.S., and the Cost Containment Fund created in § 8-14.5-108, C.R.S., on workers' compensation insurance deductible policies in excess of the limit set forth in § 8-44-111(1), C.R.S., and to clarify the liability of insurers to employees under insurance contracts. Section 3 Applicability This regulation shall apply to all insurers authorized to issue worker’s compensation insurance policies in Colorado including Pinnacol Assurance.
Section 4 Rules A. For the purpose of this regulation, "large deductible policy" means a policy subject to a deductible in excess of $5,000.
B. Pursuant to § 8-44-105,C.R.S., every large deductible policy shall contain a provision stating that the insurer is liable to pay workers’ compensation benefits directly to the employee or the employee’s dependents, in the event of death. All other provisions in § 8-44-105, C.R.S., are applicable to large deductible policies.
C. Every workers' compensation insurer authorized to conduct business in Colorado, including Pinnacol Assurance, shall report large deductible policy premiums to the Colorado Division of Workers' Compensation as follows:
D. The premium the insurer would have charged if the policy had no deductible after application of any credits or debits for experience rating, schedule rating, premium size, risk management, or employer designated medical provider.
E. The premium reported to the Colorado Division of Workers' Compensation, is subject to the assessment by the Major Medical Insurance Fund, the Subsequent Injury Fund, the Workers’ Compensation Cash Fund and the Cost Containment Fund.
F. The premium for large deductible policies shall be subject to the same reporting requirements as other workers' compensation premiums subject to assessment by the Major Medical Insurance Fund, the Subsequent Injury Fund, the Workers’ Compensation Cash Fund and the Cost Containment Fund.
G. The requirements of this regulation apply to all large deductible policies issued or renewed after the effective date of this regulation.
Section 5 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 6 Enforcement Non compliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of license. Section 7 Effective Date This regulation is effective June 1, 2012.
Section 8 History New Regulation 5-3-3, effective January 1, 1995 Emergency Regulation 98-E-1, effective July 1, 1998 Amended regulation 5-3-3, effective September 28, 1998 Amended regulation 5-3-3, effective March 2, 2003 Amended regulation 5-3-3, effective June 1, 2012 Regulation 5-3-4 CONCERNING STANDARDS FOR NOT AT-FAULT MOTOR VEHICLE ACCIDENTS UNDER WORKERS' COMPENSATION, LOSS LIMITATION IN CALCULATING EXPERIENCE MODIFICATIONS AND DISTRIBUTION OF LOSSES IN EXCESS OF THE LOSS LIMITATION Section 1 Authority Section 2 Scope and Purpose Section 3 Applicability Section 4 Rules Section 5 Severability Section 6 Enforcement Section 7 Effective Date Section 8 History Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 10-1-109 and 10-4-408(5)(e), C.R.S.
Section 2 Scope and Purpose The purpose of this regulation is to establish and implement final rules that provide standards for determining when a motor vehicle accident is not at fault, a loss limitation to be included in the calculation of workers' compensation insurance experience modifications, the loss distribution among workers' compensation classifications of any loss in excess of the loss limitation, when the use of a motor vehicle is an integral part of an employer's business.
Section 3 Applicability This regulation shall apply to all insurers authorized to issue worker’s compensation insurance policies in Colorado including Pinnacol Assurance.
Section 4 Rules A. Not At-Fault Motor Vehicle Accidents Not at-fault motor vehicle accidents shall be accidents occurring under the following circumstances:
B. Loss Limitation If an employer qualifies for an experience modification, the calculation of such experience modification shall not include any loss in excess of $2,000 per accident as a result of a motor vehicle accident in which the employee or the employer of the employee was not at fault and the use of the motor vehicle is not an integral part of the employers business.
C. Distribution of Loss in Excess of Loss Limitation
D. Employers Affected by Loss Limitation Experience modifications of employers who use motor vehicles as an integral part of their business should not be affected by the $2,000 loss limitation. Motor vehicle use should be considered an integral part of the business when the use of a motor vehicle is the primary means of the employer's operations to transport goods and people.
Section 5 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 6 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 7 Effective Date This regulation is effective July 1, 2012.
Section 8 History New Regulation 5-3-4, effective February 1, 1995.
Amended regulation, effective March 2, 2003.
Amended regulation 5-3-4, effective July 1, 2012.
Regulation 5-3-5 WORKERS' COMPENSATION DEDUCTIBLE REIMBURSEMENT Section 1 Authority Section 2 Scope and Purpose Section 3 Rule Section 4 Applicability Section 5 Severability Section 6 Enforcement Section 7 Effective Date Section 8 History Section 1 Authority This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of § § 8-44-111 and 10-1-109, C.R.S.
Section 2 Scope and Purpose Pursuant to § 8-44-111(3), C.R.S., Colorado is a net reporting state for workers’ compensation insurance. This means that an employer’s deductible up to the maximum of $5,000 is subtracted from the amount of the loss per claim for the purpose of calculating the employer’s experience modification factor. Many employers have not received the intended benefit of the $5,000 exclusion. Due to reporting requirements, insurers reported the full loss to the statistical agent because they had not actually received the deductible reimbursement from the employer. Frequently, insurers fail to correct their unit statistical reports to show the paid deductible amount, thereby depriving the employer of the benefit of the deduction. This rule eliminates the requirement of actual receipt of the deductible by insurers prior to reporting such deductible to the statistical agent for the purpose of calculating the experience modification factor.
Section 3 Applicability This regulation shall apply to all insurers authorized to issue workers’ compensation insurance policies in Colorado including the Colorado Compensation Insurance Authority also known as Pinnacol Assurance who issue policies with a deductible.
Section 4 Rule Workers’ Compensation insurers writing deductible insurance policies in Colorado are required to deduct the full amount of the policy deductible from any claim reported, up to a maximum of $5,000 per claim. This shall be applicable for large and small deductible programs, without regard to the actual receipt of the deductible when initially reporting a loss to any statistical agent for the calculation of the employers experience modification factor. Elimination of the actual receipt requirement will ensure that more employers receive accurate experience modification factors. However, insurers shall also report the total or full amount of the loss (without regard to the $5,000 exclusion above). This is to ensure that the full amount of the loss is reported properly for purposes other than calculating the experience modification factor.
Section 5 Severability If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. Section 6 Enforcement Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 7 Effective Date This regulation is effective July 1, 2012.
Section 8 History New Regulation 5-3-5, effective July 1, 2002.
Amended Regulation 5-3-5, effective July 1, 2012.
___________________________________________________ Editor’s Notes History Regulation 5-2-3, Regulation 5-2-12 eff. 07/30/2007.
Regulation 5-2-16 eff. 07/01/2008.
Regulations 5-2-11 and 5-2-16 eff. 01/01/2009.
Regulation 5-1-10 eff. 08/01/2009.
Regulation 5-2-12 eff. 09/01/2009.
Regulation 5-2-12 eff. 01/01/2011.
Regulation 5-1-1 eff. 07/15/2011.
Regulation 5.2.16 eff. 01/01/2012.
Regulations 5-1-1, 5-1-11, 5-1-12, 5-3-1, 5-3-3 eff. 06/01/2012; Repealed 5-2-1, 5-2-3, 5-2-5, 5-2-6, 5-2-7, 5-2-11, 5-2-13 eff. 06/01/2012.
Regulations 5-1-2, 5-1-8, 5-2-2, 5-3-4, 5-3-5 eff. 07/01/2012. Regulations 5-1-9, 5-1-15, 5-2-15 eff. 08/01/2012.
Annotations Unless modified, corrected or vacated, the decision of the arbitrators shall be final. The final award may be confirmed and converted to a judgment. Dale v. Guaranty Nat. Ins. Co., 948 P.2d 545 (1997).
Trial court improperly relied on 3 C.C.R. § 702-5 in summary judgment that found that plaintiff could not prevail on their claim as a matter of law. Reyer v. State Farm Mut. Auto. Ins. Co. , Colo. App. 06CA 0239 (2007).